Their Brightest Hour

S. Artesian

1. Things, that is to say relations, are looking good to and for the bourgeoisie. Stock markets around the world from Tokyo to Frankfurt to New York are, to say the very least, buoyant. Modest increases in interest rates haven’t presented any obstacles to debt markets around the world. Regulatory control of the financial sector is being rolled back and rolled up without having been tested by real world events. “Structural reform”– the bourgeoisie’s favorite euphemism for attacks on labor– has advanced the actions designed to codify, to enact as policy, what the market has brought to pass as improvisation– that is to say the temporary, part-time, sporadic, benefit-stripped modes of employment in the economically “developed,” “developing,” “underdeveloped,” and “not even close” sections of this single stage called capitalism.

All of these, and more, make the future look so bright, that the bourgeoisie have taken to wearing eclipse glasses morning, noon, and night.

Things, that is to say relations, are so good, the World Trade Organization (WTO) raised its 2017 estimate for the rate of growth of world trade by half , proudly announcing the forecast increase from 2.4 percent to 3.6 percent, an astoundingly rapid rate of growth equal almost to one half the average increases in trade before the 2007 contraction! “Yeah, baby,” crowed the bourgeoisie. “We’re halfway back to being back! Praise the lord and pass me those twenty-foot equivalent units.”

Of course, no happy day can go by without a song and the bourgeoisie are eagerly karaoke-ing to their all time favorite, “We Are the World.”

2. Meanwhile, ever so faintly, a couple of marshmallow clouds appear in the bourgeoisie’s marmalade sky, invisible of course to those wearing eclipse glasses. Like? Like auto sales in the US declining in 2017 for the first time in 8 years. The onset of the recession in late 2007 had been foreshadowed by declining auto sales, and the industry had responded…savagely. In 2006, GM bought out and laid off 1/3 of its hourly work force. Ford Motor bought out, laid off, half of its hourly work force. Chrysler, the weakest of the three, had kicked things off in 2005, even before sales declined, by laying off 10,000 hourly workers.

Like? Like despite registering a year-over-year increase, the growth of bank business loans in December slowed to the lowest rate since 2010. Average bank business loans growth rate averaged 2.7 percent in 2017 compared with 2016’s 9.3 percent rate of growth, compared with a growth rate of more than 10 percent per week in 2014 and 2015.

Not to worry too much, of course, as leveraged loans, and the corporate bond markets recorded banner years. Still, the slowdown in bank business loan growth nags a bit, especially if you’re a banker, and especially if you’re a banker old enough to remember the 2001-2003 recession where business lending plummeted and in the search for offsetting revenue streams, commercial banks spun themselves into the asset-backed, collateralized debt obligations market and that didn’t turn out so well, did it?

The good times, of course, were brought to the bourgeoisie courtesy of the stabilization of oil prices by OPEC. After the bust of 2015 and 2016, oil had regained half it’s previous price peak. “We’re halfway back to being back again again.”

The problem though for the bourgeoisie is that while half-profit is better than none, half-profit is nowhere good enough. Profit-ability is what counts, and half-profit doesn’t get them there, anywhere.

The problem is for the bourgeoisie what the problem was and what the problem always is– overproduction; overproduction not of things; but of commodities; of values that expand value. The problem is the overproduction of the means of production themselves as value, as capital.

So while the bourgeoisie enjoy the glow created by syzgy alignment of earth moon and sun, the accumulation of the means of production, most acutely as fixed assets, undermines profitability, and brings the early nocturnal celebration to a screeching halt.

3. The bourgeoisie would love to free themselves from the tether of their own fixed capital. If only accumulation didn’t involve material forms… if only it really were all ones and zeroes; if only FANGs were FANGs without all that hardware, those server farms; if only property could exist as, and within, an algorithm.

Doesn’t work that way. The bourgeoisie have not been able to so free themselves, nor reverse the processes of accumulation. Throughout this “Great Recession” and its attenuated recovery, the accumulation of fixed assets in manufacturing has continued. The “recovery” rate of return of profit on the accumulated fixed assets peaked in 2014 at 12.6 percent, declining in 2016 to 10.6 percent (my estimate is that profits for 2017 will grow 3.5 percent from the 2016 mark, less than the average rate of increase since 2010 fixed asset investment).

I’m loathe to make predictions, having last predicted that Clinton would beat Trump and before that, Carter would beat Reagan, but in keeping with that tradition, I predict 2018 will continue the decline in profitability from 2014, and will be followed by real declines in the mass of profits in the second half of the year and into 2019. The decline in profitability has triggered economic and political nationalism and trade conflicts worthy of an outright depression, with political movements to match. The “recovery” brings the bourgeoisie face to face with their most venal, vicious, and intrinsic, characters and characteristics.